A threat to your Social Security check?

Sen. Bernie Sanders, I-Vt., addresses a group of protesters outside of the White House in Washington, Tuesday, Apr. 9, 2013. Liberal lawmakers from both chambers of Congress and a coalition of like-minded groups rallied outside the White House, voicing frustration at the Democratic president they feel has let them down by proposing cuts to Medicare and Social Security. (AP Photo/J. David Ake)
— AP

Sen. Bernie Sanders, I-Vt., addresses a group of protesters outside of the White House in Washington, Tuesday, Apr. 9, 2013. Liberal lawmakers from both chambers of Congress and a coalition of like-minded groups rallied outside the White House, voicing frustration at the Democratic president they feel has let them down by proposing cuts to Medicare and Social Security. (AP Photo/J. David Ake)
/ AP

Yes
16% (62)

No
84% (321)

383 total votes.

Today, Social Security checks rise with inflation, based on the cost of a set variety of goods in what's called the Consumer Price Index, or CPI. If the price for those goods goes up, then your check does, too, to keep up with the cost-of-living. That means the government understands that a dollar 10 years ago is not worth what it is today.

Obama is proposing to change how the annual cost-of-living is calculated to something called a chained-Consumer Price Index. If approved, Social Security benefits would increase at a slower rate than they do using the current index and save Uncle Sam about $127 billion in Social Security payments over the next 10 years.

Here are some questions you may have on the proposal:

Q: What is the Consumer Price Index?

A: The consumer price index is the measurement of the change in cost of various goods. For instance, if a gallon of milk costs $2 in January 2011, but $2.50 in January 2012, then the CPI would rise because you don't get as much milk for your dollar. Right now, the government adjusts your Social Security check to reflect this rise in prices based on CPI.

Q: What is a chained-Consumer Price Index?

A: The chained- CPI assumes that as the prices for certain goods increase, people change their habits. So if the cost of beef rises, you might switch to chicken because it's cheaper. If the Bureau of Labor Statistics used that measure to calculate CPI, then cost of living by definition would rise more slowly because it assumes people actively spend less by substituting cheaper goods for more expensive ones. Social Security increases would be smaller to reflect the assumed change in habits.

Q: How big would the change be right away?

A: Chained CPI will give you a slower rate of inflation. That means your annual increase in Social Security checks won't be as much as usual.

On average, annual increases in Social Security payments, government pensions and veterans’ benefits would be about 0.3 percentage points smaller each year, according to the chief actuary for the Social Security Administration. Alan Gin, economist at the University of San Diego, said at first the change would be minimal, but would become more noticeable over time.

"It's not dramatic initially but as you keep this over a long period of time, basically the gap is going to grow larger and larger - it just simply compounds over time," he said. "So the first year if it grows at, say 2 percent, as opposed to 2.5 percent, that's only a half of a percent, but 20-30-50 years down the line the gap is significant."

Using historical chained-CPI data from the Bureau of Labor Statistics, Gin calculated that, if starting with $10,000 in Social Security in 2000, the regular CPI would pay $13,825 in February 2013. Using the chained-CPI, the amount would be $13,348. That's a 3.45 percent decrease.

Q: Is it the best measurement?

A: It depends. Some experts like that substitutions will enter the inflation calculation. But others argue that the people who benefit most from Social Security -- the elderly and unhealthy -- are the ones that Chained CPI does a poor job of measuring.

The AARP is opposing the changed to chained-CPI. Many senior citizens spend the bulk of their income on health care and housing -- and those are two areas where substitutions are rarely made.

"This theory fails the many seniors and veterans who spend much of their money on basic goods like prescription drugs, utilities and heath care — which don't have lower-cost substitutes," the organization said in an online statement, which includes a calculator of how much seniors would lose if chained-CPI is adopted.

Gin said the CPI is calculated using an urban family of four as an example, so seniors do face a different set of priorities that would need to be addressed. The Obama administration said it planned to protect the most vulnerable, including the very elderly.

Moving to the chained measure could also mean losing sight of how the cost of individual products change.

"As a consumer you want to know that the price of milk has gone up this amount, or whatever good had gone up by that amount," said Kelly Cunningham, economist at the National University System Institute for Policy Research. "This idea that you switch to a different thing all might be true, but that doesn’t tell us this change in costs."

Q: So what's next?

A: If passed by Congress, the budget kicks in Oct. 1, the start of the 2014 fiscal year. It seems that is no sure thing, as Obama's proposals so far have managed to anger both the Republicans, who are upset by higher taxes, and Democrats, who are unhappy about cuts to Social Security benefits.